The primary difference between regular chips and kettle chips seems to be the processing method. Regular chips are continually-processed whereas kettle chips are processed in batches.
Harold McGee in On Food and Cooking explains that the batch method results in a different texture of potato chip. Because the temperature of the oil drops when a new batch of potatoes is added, the potatoes take slightly longer to cook. This gives the starch in the potatoes time to absorb moisture and dissolve before the potato finishes frying. This results in a thicker and sturdier chip with a caramelized flavor.
(In the continuous-processing method, the oil is kept very hot. Moisture in the potato evaporates immediately and makes the chip light, crispy, and finely textured.)
As you probably guessed, the batch method is how potato chips were made before the invention of big processing facilities. Producers and vendors had big vats (ie, kettles) of heated oil in which batch after batch of potato slices were fried. Potato chips you make in a pot on your stove at home are technically kettle chips, too!
Whether or not every bag of potato chips sold as "kettle chips" has actually been made in this way is definitely dubious. Kettle chips have really come to mean any chip with a non-uniform shape, a real potato flavor, and a thicker, sturdier texture.
Do you like kettle chips?